Rupiah Weakens: How Nadhifah Allocates Salary for Self-Reward

The continuous weakening of the Rupiah exchange rate and the rising cost of various necessities are prompting many people to become more cautious with their spending. Recently, the Rupiah exchange rate has been hovering around Rp 17,600 per US Dollar, a condition that is also affecting daily living costs, which feel increasingly high.

Nevertheless, many people still set aside money for things considered to provide comfort or serve as a form of self-reward. This phenomenon is often known as the ‘lipstick effect’, which refers to the tendency of society to continue purchasing small, pleasurable items even when economic conditions are uncertain. The term ‘lipstick effect’ became widely known after Leonard Lauder of the cosmetics company Estée Lauder observed that lipstick sales actually increased during economic downturns. According to Forbes, this phenomenon is used to describe consumer behaviour where people continue to buy small items that provide joy amidst difficult economic situations.

Nadhifah Azhar (28), a sales manager in Yogyakarta, experiences something similar. She admits to being more frugal than before because the cost of living feels like it is constantly rising. “Previously, about 30 per cent of my salary could go into savings. Now, that portion has shrunk because living costs are rising, while my salary has not increased,” Nadhifah told Kompas.com on Monday (18/5/2026).

Despite reducing some expenses, there are two areas she finds difficult to limit: food and travelling. “Eating well and buying coffee acts as a stimulus to work more optimally. Travelling also makes me more enthusiastic about work and often generates new inspiration upon returning,” she said. Consequently, she admits to still allocating a specific portion of her expenditure for self-reward needs. Beyond food and travel, Nadhifah also occasionally engages in window shopping and purchases fashion items as a form of appreciation for herself after working hard. “In my opinion, self-reward has now become a necessity. As a result, I do have a specific budget allocated for it,” she added. Every month, Nadhifah sets aside approximately 10 to 15 per cent of her salary for these self-reward needs.